Do People Perceive the Implications of Religiosity on Accounting Information: An Investor Perspective

• In Event: Accounting and Society

Abstract

This study investigates whether investors perceive the implications of religiosity by looking at the value relevance of accounting information. Given the growing accounting literature tests the value relevance of accounting information by including additional accounting measures such as R&D and other comprehensive income, few studies address the role of religiosity in the overall value relevance of a comprehensive set of accounting measures. By examining the value relevance of accounting measures conditioned on religiosity, I find that investors perceive the implications of religiosity and value accounting information differently for firms from high religiosity areas and low religiosity areas. And through including an event study, this paper first demonstrates that the 2012 presidential election created an external shock to investors’ perceptions about religion, which leads them to consider the implications of religiosity when they assign values to accounting measures.

Author

• Yiding Wang, University of Oklahoma